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tv   Street Signs  CNBC  May 3, 2013 2:00pm-3:01pm EDT

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historic day out in the markets today. the s&p 500 is above the 1600 mark. the dow just a hair above the 15,000 mark. >> we're in the same room. that will do it for today. street signs begins today. >> indeed it is an historic day on wall street with the dough earlier today breaking above 15,000 for the first time ever and the s&p is solidly above the 1600 mark. there is lots of money to be made today. a seemingly monster jobs number, driving from the get go. but we pulled through the report and found really nerdy nuggets that told the real story. and did we just get handed a real dose of housing hopium? and we will tell you the names
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you should not be ditching this month. >> when they crack 1624, that is a bull market, folks, from the november lows. it's showing about a 6.5% gain today. the best day in ten months. don't worry folks. it's nearly the end of the day but not just yet. i don't mean to sound like a downer here, but i want to be a real realist. does this smell like 2007 all over again? >> no. whatever we're in now it's definitely not 2007. they're much lower now. housing was in a bubble back then.
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the old high, back about 2,000. and you see how far we started breaking above that level. the enormous momentum in the markets. 1565. that was the 2007 high. look at this. we're 35, 40 points above it. my point is we're 3% above that old 2007 high. the further we keep going, that gives you a lot of comfortment today all of your big names, tech, energy, materials, they are up today. for the week they have been up. these are the names for the week today.
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nearly a trillion dollars. now we're at 3 trillion dollars. that's certainly an issue but it's different. >> it is different. okay. there is your realism at the end. what are we looking at in terms of the reaction? the settlement yesterday. maybe more appropriate. take a step back. 2%, 160 midpoint is 180. we're at 174. keep it simple. i think the treasuries are going to be in a range. i think the range is probably 180 pivot coming up. maybe 2%. but i don't look for a huge range expansion.
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has the same beliefs about housing that the government had in the early 90s that led to the housing crisis. from where i sit if there's another issue, i don't think the fed can use the same tools again if it goes wrong. >> very good point. a dose of realism now. and i promise to ask you the same question as i asked bob. >> i believe in february of last year you called dow 15,000 and a lot of people said that you were unrealistically bullish.
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do you have a new prediction? i had a lot of conviction that the market was going to move upward. it is my call by the end of this year. >> clearly there is going be a flutter. if the fed says we're going to dial down on qe, there is going be a flutter in this market. i say a flutter because i believe it is earnings and dividend. bob was giving great information on how this compared to 2007. we are 15 to 20% above the
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earnings that was in 2007. we are 25% above on dividend at that level. there is tremendous fundamental support. and in an environment with much lower interest rates which means much less competition for stocks. i think those are going to be the drivers for the continuing gains we see in the market for the next year or two. >> so you're on the record there saying 17,000 quite possible for the dough by december of this year. >> all the central banks are supposed to be in easing bode. we're going to have thm probably joining the party. what's that doing. it's driving a lot of money to the bond market.
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more importantly we don't have political quamag quagmires at t moment. that's not happening. we have given back all of the gains in volatility that we saw. and probably more important, mandy, professional and retail investors are not in this market. u.s. fund managers have their global allocations, specifically u.s. stock allocations. while we have a massive amount of money coming in off the sidelines. >> i'm really glad you raised that point. this is the most hally i
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have seen. there are so many people who did not get in on this. they have not participated. what do that do if they want to get in. is it too late? something that is really important for the u.s. consumer. gasoline prices continue to track down. now, would i go all in on housing at this point? i wouldn't do that. it's a very crowded trade. i would be looking at underperforming sectors. technology has been underperforming. i would be looking at casual diners and discretionary. that will continue to cycle higher. those sectors have a lot of tail winds to them. most importantly this massive amount of cash all of the sidelines, mutual funds recorded
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their 17th consecutive weekly inflow. we have seen $53 billion come into mutual funds. that's a tremendous amount of buying power. >> if we think our markers have done well, we put up a fantastic worldwide market. shows that really the u.s. market is only the 11th best r performer globally. >> i think that markets are cheaper on the world. in europe, there is 11 to 12. there are 15 in asia and 15 in the emerging markets which years ago we used to say anything under 20 was a buy a follow up
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on the flows. the 50, 60 billion is still less than 15% of all the money that flowed out how much money is on the sidelines? trillions of dollars. >> trillions. >> $150 billion, that only represents 5% of the money market assets coming out. there is still tremendous amount of money on the sidelines. pay attention to the politici politicians. right now it definitely feels like down 17,000, an easy
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possibility going into the end of the year. >> let's not let the politicians screw it all up. >> let's get those nerds! >> nerds! >> what are we waiting for? >> plus a big silver lining for housing. who really has the biggest bets on tomorrow's kentucky derby? street signs is back in 2. ♪
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>> on this historic day it is my duty to report to you what exactly is going on with the market. the s&p 500 also said 1600 for the first time ever. so you already know the headline numbers. what other numbers should you be watching. what did you find out about? >> are going to stretch. >> we want to know about long term unemployment. >> we're going to stretch the definition of nerd. it will be capital n-e-r-d. it is on something that is so important. folks, believe me. work with me. i want to show you. we will talk about this issue.
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here is a quick definition. >> i'm sorry. business cycle changes. short term changes. that's the stuff you address with policy. is it structural or what? there is a huge, huge increase and then it comes down much faster. are you gasping for breath?
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>> not so fast. >> take a look now at the numbers, okay? what has happened over the past year is we put 687,000 unemployed workers, it has been declined by that amount. so most of that is back. here is the trouble. over the past several months, two thirds have dropped out of the work force while one third have found work this month alone, more balance. half found work and half dropped out. maybe the beginning of a trend where we appear to be putting the long term back to work. >> it was definitely worth sticking around for. >> let's bring in. and lew green, strategist at drw
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trading. i would like to get to you. how many of the jobs stha have been lost will never come back? to some of the points, we have a lot of companies making record points. they are doing a lot more with less. >> that's the main concern of bernan bernanke. i think a lot of these jobs are coming back. and you're going to take something new to get things going again. >> i want to tweak mandy's question. it's not are the jobs coming back. are the unemployed reemploebl? a person who has been out of work for 27 weeks or longer.
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can they be brought back into the work force? we know old jobs go away and new jobs take their place. >> that is a critical question and that's a question that we don't have the answer for. that's one of the reasons that bernanke continues to press because he doesn't want that to become the situation. business is a corporation. there are corporate profits that post four highs. the wages as a% of gdp is at record lows. will these people come back? i don't know. that becomes a matter of education and a multipronged thing. probably not. >> i don't want to overreach this but none the less is it possible to say that 165,000, a little bit plus and minus is abo
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about. >> it was a very good report. >> when we dell f into the details. we saw it. a lot had to do with folks working hot time. that is an overall issue. it could be that on the workweek part that it's furloughs. >> they come back into the work force.
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>> there is early indications that we have seen today and those in that 50 plus where the bam care kicks in, there may be reduction. critics have been more about it. but guys have been pointing that out. >> do we need to worry about the quality of jobs that have been created? we might have 165,000 jobs created. >> more than otherwise. it could get by with the part time workers.
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at the same time the employment rate sits at 58.6. we the baby boomers are in. since december of 2009. >> i think what he is talking about is a real issue. it's what we call wedges. equal demand. if you want it you should get it. you should be able to get a job. >> could be in terms of lack of lending. we don't say there is nothing
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you could do about it. the question is whether or not the federal side of the government. >> there are elements of structural unemployment and it clearly has increased. but there is also the agate demand or cigly call part of it as well. so when we look at the structural part we have made some progress. we have seen it out. it's actually when you follow it it's starting to make progress. we're starting to see job openings increase and we are clearly seeing the unemployment rate decline.
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>> i think you have got a fan. hello. fact checking. if we pay attention rngs we all love something. there you go. thanks everybody. just ahead. we found some housing hopium. [ female announcer ] there's one thing dave's always wanted to do when he retires -- keep working, but for himself. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far.
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>> we're going to start with american express. they talk about that wealthy card holer base. they talk about the strong financial health. >> we have also got mastercard. >> that's a different sort of thing. missed on the top line. the connectives describe the member as a little dodgy. that's a word they used.
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>> that means a little shady in australian slang. >> walt disney as well up about 30% this year. >> the important news is iron man three. >> trip advise or, another all time high. >> reports next week. the street wants to do 46 cents. that would be year-over-year growth. >> let's break out the 500 pound buckets of pickles.
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>> in fact it's getting absolutely crushed today. it lost about a quarter of its value. >> this is a fascinating story. the company may be best known to some people because about 25% come from rotorooter. but the story today is the company has been sued by the u.s. for alleged medicare fraud because the rest of its business is for profit hospices. this is something that i talked about on air about. back in about 2011 and it has been a story that has been moving along. the stock is down to where it was earlier in the year. a year ago. i have to tell you something and say if there is really an issue here, what really happens to the stock. another home health care company which if you look at the chart
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has really been hit very strongly ever since it got involved with alleged medicare issues and a big part of its business? for profit hospices. >> i was just reading that the lawsuit alleges that they knowingly bill ed. >> they wanted to put her to a hospice. as we finally persuaded the hospice and the hospice let her die in the hospital. it was fascinating.
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>> this market is going to be a headline driven market. europe has been quiet for a while. no real major headlines coming out of washington. it's going to be different types of market movers that will help move this market. but i think getting through this week with a lot of economic data
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and a bunch of earnings reports was very important and key. >> got it. thank you very much for joining us. >> housing clearly had a big effect. let's get to one who has been digging in. give us the details here. >> there is no question. housing is fuelling job growth. 7,000 residential specialty contractor jobs. those contractors, of course, need more trucks. so ford and gm this week reported sales of pick ups up
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around 24%. gm's vp of sales told phil lebeau that housing is behind it. homeowners spend $7,400 furnishing a newly built home. and rising home prices up every 10%, they fuel more spending. don't for get general confidence. it's huge. >> stronger jobs could mean an end it will only do so until the outlook for the labor market has improved substantially in a context of price stability.
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there is more online. mandy? >> you know what? if that's the hitch, it's probably some way off, it's a big one. thank you very much. let's take a look at the two big movers today. let's get straight to sharon epperson. give us the highlights. >> i'm watching the commodities market rise here. that is what traders are focused on. >> keep in mind we have already seen a rally underway in the previous session. traders have gotten word that bp will have pipeline maintenance going on in mississippi. you could see oil headed to $93
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a --. so we will have to wait and see what happens. and the fact that the london metal exchange is seeing a decline. add to that the positive jobs report and the fact that this is a very short market that a lot of folks had long positions in. back to you. >> thank you very much. still ahead, we will be jumping in on the earnings squad team because that hot seat is not filled by melissa lee. she will be back next week. and later on, the don't sell in may stocks are all star stock are going to tell us which names they would never ditch this month. that's all ahead. what is coming up on the final weeks show closing bell.
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we're going to look at why some traders think that the index is the beginning stages of a melt up. and three potential roadblocks. now says the dough is heading for 20,000. he will tell you when when we talk to him coming up. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]'ll bust your brain box. ♪
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>> we update the earnings story. i'm filling in for melissa lee. great to have you on the show. 81% of the s&p 500 have reported so far with 61% beating
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estimates. there are plenty of earnings out next week. >> are we expecting anything this time around? >> under the new leadership. >> things will change. it's not really the new leadership. this will be a fun one.
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>> so much competition out there. >> absolutely. this stock is also down. come back still has a long way to go. >> tv, electronics have remained weak spots. >> sony saying they will make a profit and it will be larger in the measures that we have seen in the last few weeks. >> how much will it be the result of true gains in electronics versus asset sale?
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>> the proof will be in the pudding. >> they really need to see some core improvement. >> i know you have been following this company through all the ups and downs. >> he has really got to start to lay out a strategy. >> you know, the stock was at 110. it's anyone's guess here. the big issue is going to be
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tremendous competition. what will we see? >> haven't they held up better than expected? >> they may keep a starbucks but at what price? that's going to be an issue on the call. rsh that was enormously short. i don't necessarily know he will touch on this name. >> what do i know? >> what do you know? >> not much. >> by the way, that is it for earnings squad today. if you want to join in the conversation, you can. tweet us. stick around.
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>> weave one but two huge interviews lined up for monday. both warren buffet and bill gates will be speaking to cnbc. don't miss it.
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>> will an improving jobs pick to be a head wind? it's really great to have you on our show. i was looking at the incredible numbers here. you closed on $70 billion in home loan volume. how are you doing this? >> we can certainly keep up that momentum. in a time frame that makes it very, very vol ubl. giving clients options and building a brand they have diseased that rsh is it easier
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for me to get a loan at your place? >> definitely not easier from a credit per speculative, but what is easier you have to provide the same guidelines as anybody else. at the end of the day, they are fannie mae and mac loans. >> are you worried about the markets that we saw today, they got to peel back the stimulus, rates will go higher. are you concerned about that impact on your business? >> no, i'm not concerned about get rates are a part of the business we are in. we'll see what the feds decide to do here. again, we have to see it sustained because at the end of the day for the housing market
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really to come back, you have to see employment numbers getting much, much better. we are seeing areas in the country where you see home price appreciation. >> indeed, it is, bill, thank you for coming on our show. >> thank you. >> you know the old saying, selling may go away. what if you want to say no way? what stocks kould should you stick with? we are joined by michael, what should we be sticking with in may? >> well, i think any long-term investment that you believe in. the old addage, go away in may goes up with there, go on board the train is leaving the station. there is some validity, if people go on vacation, they aren't paying attention, i think from a long-term standpoint, what you like, we should keep. some areas, we run diversification in our, within our asset classes, within
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sectors, et cetera, but we're looking at names like freeport, mran, william sonoma and facebook and other difficult growth stories or stocks that haven't been participating in the rally today. >> matt, what stocks are in europe in your not to sell list? >> first of all, i like dividend stock, with volatility curves in the forum the last three summersment i like canadian telecom. i like hcp, a healthcare read, it's only aging demographics. i like altria. arguably, all those products are needs, not wants. when you look at from the summer of months of the last three years, the s&p was down roughly 6.7%. each one of these stocks were up 8, 7% and 5% respectively. so i like firms that you own and
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focus on needs not wants. >> that's an excellent business model. i will flip this over and ask you what will you be selling in nay? what do you think has had a good run and you will take profits on? >> well, i think stocks in the more defensive names, consumer staples. biotech and pharma, potentially. some of those more utilities. some of those defensive names that have really rallied in the last several months, while still great stories are probably a little bit overpriced. we tend to think more, what hasn't participated, what hasn't been beaten down and focus on those areas. i think that's where we're oriented. >> what about you, matt, what would you sell in may? >> i totally disagree. i'd sell the netflix and look to take profits potentially in the money sector banks and have a good run. i think if they do get beat up over the summer month, there is some profit-taking there.
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focus on dividends, if you think volatility will work. if we see a summer swoon, i'd rather be in dividends than stocks more aggressive vs. conservative. >> quickly, mark, your thoughts on the markets today and where do we go from here? >> well, i mean, certainly, it saw somewhat of a relief. the jobs number was much better than expected. i think you need to get in and see consistency. some of your other guests have said get what's also underneath this number? is it maneuvering around odamacare? is it solid, sustainable growth? no question, good news today. let's see what happens over the next several months. >> okay, we had jeremy siegel on today. he called the dow in february of last year. he was boo booed by the naysayers out there. now he's more bullish saying we could get to 17,000. what do you recommend, matt? >> i look at from this standpoint everybody likes
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enough market. i think it's something when we see everybody joyous, i get a little bit nervous. it makes me more nervous to own the stocks and i get paid to participate. i think now a time to be a little conservative. enjoy the ride. understand, eventually, there will be more volatility that occurs. if that's the place, dividends is the place to be. >> matt, enjoy that beautiful sunshine out there. coming up, who really has the best bet on the kentucky derby? it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon.
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investing involves risks, including loss of principal. tdd# 1-800-345-2550 so here's the skinny. owning race horses is almost always a losing proposition. the return on investment is usually an emotional one, not a fiscal one. brian shactman is live at the kentucky derby on some horses who are poised to cash in, brian. >> if you win the derby, it is worth your while. already, there are some owners in the black on their investments. rick pitino is a part other than in goldencents. the majority owner is dave kenney. they bought the horse at auction when most of the people had already left. he's already an 11-2 favorite to win. not much to overanalyze, not cheap.
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$380,000. for mike repole he has the money. he co-founded glassman. they sold it to coke for 4.1 billion in '07 t. horse had already made close to a million dollars. they bought the orb for $50,000. if dinney phipps wince, imagine, mandy the key with these horses, the real money is in stud fees. i don't have to explain to you what that means. >> no, you don't, this is a family channel as well. brian, since it is job's day. i understand that about 10,000 jobs are being created for the kentucky derby. >> yes, churchill downs employs about 12,000 people here. there will be about 60,000 fans here. chdn, churchill downs the stock hit a new high with other companies on this
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record-breaking friday. >> enjoy yourself. have some mint julips. we will catch it tomorrow on cnbc. coverage begins live at 8:00 a.m. on cable, race time, kick off 4 on cnbc. thanks for watching "closing bell." "closing signs" is next. have a great weekend. hi, everybody, we're into the final stretch. welcome to a special edition of the close bell. we are in closing territoriment i'm maria bartiromo as the stock exchange. >> the dow may close above 15,000 for the first time ever. the s&p looks like it's going to hit. it will be above 1,600 for the first time ever. the better-than-expected jobs growth in the unemployment this morning really had a lot to do with this. >> even though it was a lot


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